DOL Audits: A How To

Even with all your ducks in a row, an audit from the Department of Labor (DOL) can be nerve-wracking experience for any business. The goal of a DOL audit is to ensure your organization is in compliance with employment laws. These audits can occur at random but are most often spurred by employee complaint. Compliance is important, and equally important is your ability to prove it. Throughout a DOL audit, the auditor will need verification of your compliance. They will do their best to maintain an open line of communication but the key to making it smoothly through an audit is cooperation and adequate documentation.

After being notified, the first step in preparing for a DOL audit is to respond to the DOL audit letter. Adhere to any stated deadlines and provide all initial documentation requested. At this point, it is time to plan for the impending investigation. After making initial contact with your organization’s accountant, HR manager, benefits consultant, and, in some cases, benefits attorney, reach out to the auditor. Ask for specifics about the topics of investigation (overtime compliance, unemployment insurance, minimum-wage compliance, etc.), the time period they will look at, and any employees they will be interviewing. This allows you to prepare ahead of time, gathering information needed and ensuring employees are available for interviews.

While they often provide notice, DOL audits move quickly after initial contact. The best way to prepare is to consistently maintain accurate and organized files; this will make it easier to provide specific documentation. Be prepared to offer documentation on the topic of investigation as well as on organizational policies and procedures. Keep track of all information provided to the auditor, as it can be helpful in staying organized and if compliance violations are found it will assist in speedy resolution.

The next step is to gather a team, one or two employees who are dedicated to assisting the auditor. They will ensure documentation is provided in a timely manner, that all documentation is not only provided but tracked, and may assist in scheduling interviews at the auditor’s request. In addition, these employees act as a point of contact for management and the auditor, ensuring clear communication and a smooth ride throughout the process.

No matter the reason for the audit, remember the ‘human factor’ for both the auditor and your employees. While audits are stressful, particularly if they originate from an employee complaint, your goal is ultimately to make the process as painless and transparent as possible. Be sure to remain cooperative and courteous throughout the process. Remember, you and the auditor are acting in the best interest of your employees. If you are doing your best to understand and comply with employment laws, at most the audit will result in providing guidance for improvement.

After the audit is complete, request a copy of the auditor’s findings. This will assist in addressing any violations found and offer an opportunity to strengthen policies and procedures. Take time to thoroughly address any violations and then remember self-care. Audits are stressful and, whatever the outcome, take their toll on management. Take a moment to breathe and remember to allow yourself time to recover from the stress.

While a DOL audit is not entirely avoidable, ensuring your organization has a focus on compliance and fair treatment of employees is the best way to move through the auditing process smoothly and effectively. One way to strengthen your organizations ability to face external audits is to hold self-audits. Review policies, procedures, job descriptions, etc., ensuring compliance with all employment laws. Self-audits can help your staff to build a familiarity with employment laws at all levels and put your organization in the best situation to avoid DOL audits in the future. Nothing can altogether stop a DOL audit, conducting self-audits can assist in ensuring your organization is prepared and any audit runs its course without negatively impacting your employees or your organization.

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